You can annualize your income on the penalty form (Form 2210) to reduce or eliminate your penalty.
With annualization, you divide your income into four periods and your fourth quarter payment offsets your Roth conversion.
To annualize your penalty:
- Type “underpayment of taxes” in Search in the top right
- Select “Jump to underpayment of taxes”
- Continue to “Annualized Income Method,” say Yes and follow the screens
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